Gerresheimer AG

Ladies and gentlemen, welcome to the publication Q1 2025 results conference call. I am George, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star N1 on your telephone. For operator assistance, please press star N0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Mr. Guido Pickert, Vice President, Corporate Investor Relations. Please go ahead.

Thank you very much. We welcome you to our Q1 2025 results call presentation, which will be hosted by our CEO, Dietmar Siemssen, and our CFO, Dr. Bernd Metzner. For the start, I would like to our CEO, to start the presentation. Dietmar?

Yeah, welcome, everybody. Thank you for joining us this morning. I will start by giving you an overview of our business performance and main influence of the first quarter. Then Bernd Metzner, our CFO, will take you into a deep dive into the numbers. As always, we will then be happy to take your questions. The most important impact on the Garosama Group going forward is the first-time consolidation of Barmioli Pharma. Our group results in the first quarter. The acquisition of Barmioli Pharma, by the way, the largest acquisition to date for Garosama, takes us to a completely new level in terms of revenues and adjusted EBITDA. Two success stories will have one joint future. We will take a leap forward from 2 billion euros revenue in 2024 towards a level of around 2.5 billion euros in 2025 with an adjusted EBITDA margin of around 22%. As pointed out in previous calls, the acquisition allows us to create a global molded glass powerhouse, a strong and independent global unit with a diversified portfolio in pharma, cosmetics, and food and beverage. And it opens new opportunities for system integration. Portal closure combinations, which create a completely new category of high-value solutions for garrison. The acquisition significantly strengthens our position as a leading system and solution provider for the pharma and biotech industries. and lays the foundation for our projected sustainable profitable growth of 8% to 10% in the mid-term, strongly supporting our margin and cash flow goals. Projected organic growth of 3% to 5% in 2025, in comparison to the combined pro forma figures 2024 of Barmioli Pharma and Gerasimer, will mainly be driven by the ramp-up of new product lines, an increasing shift to high value products and the return to normal operations in our facilities, Morganton and Bloor. Morganton, as you know, was severely impacted by the flooding caused by Hurricane Helene in late September of last year. Part of the restoration work is still ongoing. Most of the production has been restored and will be fully operational again in the next weeks. In Bloor, We are in the final stage of exchanging one of the two furnaces to a state-of-the-art hybrid furnace. Restart of production with the new furnace will be end of April. Since the beginning of our fiscal year 2025, Bamioli Pharma has been fully consolidated in our group results. That means we are now playing in a new league. We reached a whole new dimension in terms of sales and earnings. This is evidenced by a jump in reported revenues and adjusted EBITDA in the first quarter. Revenues grew by 11.6% from 466 million euros in Q1 2024 to 520 million euros in Q1 2025. Our adjusted EBITDA grew even stronger by 13.1% from 81 million euros to nearly 92 million euros. However, we had some effects which rated on our group's organic performance in Q1. As already flagged in our Q4 and full year report in 2024, we saw an organic decline in Q1 2025 compared to the previous year's combined performer figures. In organic terms, revenues were down by 6.5%, the adjustment EBITDA by 9.3%. The main reason for this is a phasing effect we see in syringe business, which has shifted revenues and adjusted EBTR from Q1 in Q2 and Q3. We also saw softer demand in our molded glass business, especially in the cosmetic market. We will return to organic growth on a like-for-like basis already from Q2 onwards, supporting our 2025 guidelines. Order intake in Q1 was very good and added to our strong order book, which is the base for continuing our growth in absolute and in organic terms in the upcoming orders. We introduced our key priorities for 2025 already in the last call. We will focus on the integration of Bomioli Pharma to leverage the opportunities of the combined portfolio and new capabilities and system integration. We will continue to execute our growth projects and ramp up new lines, which we start to contribute to our top and bottom line. And we are committed to setting new standards for customized solutions and customer excellence as a mission critical partner for the pharma and biotech industry. Having seen our first quarter results, the most pressing question for most of you is probably why we are so confident of achieving our 2025 guidance and where the growth will come from. In summary, the key growth drivers in 2025 will be a return to normal operation, new ramp-ups, and a continued shift to high-value products. The return to operation refers to our plants in Lohr, Germany, and Morganton, US. I have already mentioned the new furnace in Lohr, Germany. Together with the Bamioli Pharma plants in Bergantino and San Vito, Lohr is one of our eight molded glass plants worldwide. This plant will produce a wide variety of flint and amber glass products from syrup, dropper, tablets, and infusion bottles for the pharma industry to glass containers for the food industry and bottles for the beverage industry. Furnaces in glass production have a lifespan between 8 to 12 years, depending on size, technology, and maintenance. So we have planned and prepared this exchange for quite some time now. As the regular furnace exchange for thin glass was coming up, we decided not only to upgrade to state of the art technology, but also to increase the capacity of this furnace. The new furnace in Loa is an oxy-fuel hybrid furnace, which allows to be powered with a higher proportion of up to 50% electricity instead of natural gas, thus reducing our carbon emission proton by 40%. The new technology and the capacity increase led to a number of company construction and infrastructure projects at the plant. These have been ongoing for the last two years already and include, for example, the expansion of buildings, a new extended power supply, a new eco-friendly cooling system, and the upgrade of production equipment. We started the actual exchange of the flint glass furnace in January. The amber glass production continued despite the ongoing construction work. In the picture, you see the construction shell for the new furnace. We will restart production with the new furnace plant beginning May. In Morganton, North Carolina, US, restoring after the flooding of the plant in September 2024 is still ongoing. We were able to restore about half of the production capacity by the end of 2024. Our team in Morganton have been and still are working really hard to get the production fully back online. In Morganton, we produce glass vials for the pharma industry for the U.S. market. The flooding also delayed the expansion of the facility to increase our annual production capacity of vials supported by a program of the BADA. We now expect to restore full capacity in the next weeks. The ramp-up of new production lines for medical devices in Skopje and Petrie will also contribute to our organic revenue growth in 2025. Our plant in Skopje, the Republic of North Macedonia, has been a production facility for medical devices, such as drug delivery systems, diagnostics, and medical products made of plastic since 2019. We will ramp up new lines in 2025 to serve long-term contracts for drug delivery systems as planned. You may also have seen our press release last December about the planned expansion with a new hole to produce glass syringes. This is a growth project which will contribute to our mid-term growth plans. We are currently in the qualification phase for the syringe production with one of our key customers. At our Peachtree City site, close to Atlanta, we produce medical devices such as inhalers, components for infusion sets, microinjectors, test cards for microbiological tests, and very important, autoinjectors, which can be used in diabetes and obesity therapy, among other things. Peachtree is currently being expanded in two stages. Ramp up of the production in the new production hall right next to the existing facility has already started. The construction work for the second expansion stage, a completely new facility roughly two and a half kilometers or miles from the original plant is still ongoing. We expect contributions from the first expansion stage already in 2025 and from the second expansion stage from 2026. more to come to contribute to our mid-term growth plan. The last two pictures on this slide are examples for the continuous shift to high-value products. Bünde, Germany, is currently our main production facility for syringes. What we have seen here over the last few years is a continuous shift to high-value syringes, including ready-to-fill and customized configurations mainly driven by the demand for solutions for large molecule biologics. In 2025, we will further increase the share of high-value syringes from Bad Bünde. This will contribute to our 2025 organic revenue growth and will help us to further improve our margins. Another example is the continuous shift from standard bulk vials to high-value vials, which include, for example, elite vials and ready-to-fill configurations. We are continuously increasing our share of high-value vials, building a strong market position in bulk. Querétaro in Mexico is one of our production facilities for tubular glass products, such as vials, ampoules, and cartridges. Most importantly, in Querétaro, we are currently setting up the first production line for Easy-Fill Smart, the next-generation packaging platform for ready-to-fill vials. Commercial production will start in the second half of the year, contributing to our growth and margin expansion in 2025. What we are currently seeing in the market is a similar shift from bulk to ready-to-fill as we saw in syringes years ago. Based on our experience in a highly regulated market, such as the pharma market, these technologies changes take roughly 20 years. Of the roughly 13 billion vials in the market for 2022 as reported by IQVR, we estimate that only a fraction were ready-to-fill vials, primarily driven by the need for smaller lot sizes and solutions for large molecule applications. Twenty years later, we believe it will exactly be the other way around, with ready-to-fill vials dominating the market. The same, by the way, applies for the cartridge market. We currently see a highly dynamic development in the market for ready-to-fill vials and cartridges, driven by the rise of large molecule biologics in the market. This could significantly accelerate the transition to ready-to-fill. We had a late start in the ready-to-fill market but caught up very quickly. Today, our RTF elite vial is one of the best performing vials for the fill and finish process in the market. And our order intakes reflect this very well. Superior operational efficiency and de-risking the fill and finish process are key criteria for our customers to move from standard bulk to high quality elite vials and ready to fill vials. In addition to that, we noticed that pharma companies require smaller batch sizes for personalized medicine and highly innovative biologic drugs. EasyFill Smart, the new platform solution for rate-to-fill vials, which we start to deliver from Carretero in the second half of 2025, has all the advantages of the rate-to-fill format to address these needs of the customers and many more. For example, it significantly reduces total cost of ownership while delivering superior quality with around 97% fewer particles. It is also more sustainable as it enables hydrogen peroxide vapor sterilization instead of sterilization with ethylene oxide, and it reduces CO2 emissions by more than 40%. Our progress in our expanded retrofill offering is a great example for the successful transformation of Gerasimer from a commodity provider to an innovative high-value system and solution provider and preferred partner for the pharma and biotech industry. Thank you very much for the moment. With this, I will hand over to our CFO, Bernd Metzner, for a deep dive into our financials for the first quarter.